Female chief executives and business leaders in Australia face an average pay gap of $158,632 compared to their male counterparts, according to the latest data from the Workplace Gender Equality Agency (WGEA). This stark disparity highlights a persistent gender pay gap, even among the highest ranks of corporate leadership.

The WGEA’s annual employer census, which for the first time included executive remuneration, revealed that the gender pay gap at the CEO and head-of-business level stands at 27.1%, far exceeding the national average total remuneration gap of 21.8%. This figure incorporates salaries, bonuses, overtime, superannuation, and other allowances.

“It’s alarming that even in the most senior roles, there remains such a significant difference in pay between men and women,” said WGEA Chief Executive Mary Wooldridge.

Part of the disparity stems from industry-specific trends. Female CEOs are more likely to lead organisations in lower-paying sectors such as healthcare and education, while male CEOs predominantly lead higher-paying industries like financial services.

Further complicating the issue, some companies have reduced executive compensation when transitioning from male to female leadership. Qantas, for example, cut its CEO remuneration by 26% when Vanessa Hudson succeeded Alan Joyce.

“These industry and role dynamics add to the challenge,” Wooldridge explained. “When women replace men as CEOs in some high-profile companies, it’s often at significantly lower pay levels.”

When measured on an hourly basis, the gender pay gap appears less severe. In August 2023, the median hourly wage was $40.50 for men and $38.20 for women, reflecting a gap of 6%. However, this measure doesn’t capture disparities in bonuses, overtime, and other benefits, which tend to favor men in senior roles.

Despite these challenges, incremental progress is evident. Over the past year, the national total remuneration pay gap (excluding CEO pay) narrowed by 0.6 percentage points, and the median-based pay gap dropped by 0.7 percentage points to 18.3%.

A growing number of organisations are taking proactive steps to address pay inequality. WGEA reports that 68% of employers conducted gender pay gap analyses in the last year, a 13 percentage point increase. Additionally, 59% of companies now set measurable targets to reduce pay gaps, up by 17 percentage points.

“These trends show that employers are committing to change, and we expect to see further improvements in the coming months and years,” Wooldridge said.

The introduction of mandatory pay gap reporting has already led to shifts in corporate behavior. Chief Executive Women (CEW) President Susan Lloyd-Hurwitz emphasized the transformative impact of transparency, noting that many companies have adjusted practices to address disparities.

“Mandatory reporting has driven positive changes, but more needs to be done. Achieving gender equality isn’t just a moral issue; it’s an economic imperative,” Lloyd-Hurwitz said, highlighting the potential GDP boost from increased female workforce participation.

To accelerate progress, the Albanese government plans to introduce legislation requiring larger organisations to set measurable gender equality targets. These efforts aim to build on current reporting requirements and foster meaningful action toward closing the pay gap.

While these initiatives are promising, entrenched barriers remain. From unconscious bias to structural caregiving inequities, women in leadership face multifaceted challenges. The trend of reducing executive pay for female CEOs also raises questions about the perceived value of women’s leadership.

Achieving pay parity requires sustained collaboration between the public and private sectors, alongside cultural shifts that challenge stereotypes and promote equity. Transparency and accountability will be crucial to ensure progress.

For female CEOs, the $159,000 pay gap is a stark reminder of the hurdles they face at the top. Addressing this inequity is not just about fairness but about building a more inclusive and prosperous society.